Cost Of KanCare Expansion Debated Ahead Of Key Vote

A dispute about the cost and potential benefits of expanding Medicaid eligibility is heating up ahead of a Kansas Senate committee vote on a bill.

In testimony Monday to the Senate Public Health and Welfare Committee, supporters of expanding eligibility for KanCare, the state’s privatized Medicaid program, said expansion would more than pay for itself.

Former Kansas Senate President Dave Kerr, a Hutchinson Republican, said in its first full year, expansion would add about $81 million to the cost of KanCare. But he said it would generate more than $154 million in revenue and savings, enough to cover the costs of expansion with about $73 million to spare.

“The net effect of expanding Medicaid will be positive, I’m very confident of that,” said Kerr, who chaired the Senate’s budget-writing committee when he was a legislator.

On Tuesday, Susan Mosier, secretary of the Kansas Department of Health and Environment, the state agency that oversees KanCare, challenged Kerr’s analysis and similar estimates formulated by the Kansas Hospital Association in her testimony to the Senate committee.

“The numbers they have are seriously flawed,” Mosier said, charging that Kerr’s financial figures were based on inaccurate assumptions about the economic benefits of expansion and the extent to which federal funding could be used to supplant state dollars.

“If you don’t have the right assumptions, the right data, you can come to wrong conclusions,” Mosier said.

The state’s share of expansion costs would total $67.2 million, according to KDHE.

In a rebuttal memo distributed Wednesday to members of the committee by the hospital association, Kerr said he relied on conservative assumptions. As an example, he cited his estimate that an influx of federal Medicaid dollars would generate a $25 million spike in state tax revenues.

“Other (expansion) states have seen 13 to 18 percent of new spending come back in tax revenues,” Kerr wrote. “We have estimated only 2.5 percent.”

After reviewing Mosier’s testimony, Kerr wrote that he was “more convinced than ever that KDHE has ignored most of the savings and benefits” of expansion.

Sen. Barbara Bollier, a Republican member of the committee from Mission Hills, said Mosier’s objections to the cost estimates weren't surprising.

“The (Brownback) administration stands opposed to expansion,” Bollier said. “So, they will do whatever they can to make it look as bad as they can. To me it discredited them more than it did Senator Kerr.”

Sen. Vicki Schmidt, the Topeka Republican who chairs the health committee, has scheduled the expansion bill for a vote Thursday, the same day that the U.S. House of Representatives is expected to vote on a Republican replacement for the Affordable Care Act that among other things would nullify the Kansas bill.

Even so, Bollier expects the committee to approve the Kansas bill for a vote in the full Senate.

“It (the federal bill) doesn’t change anything,” she said. “We have the votes in committee to pass it (the Kansas expansion bill) … and we have been assured by the Senate president and by the majority leader that we will run the bill.”

What the expansion bill would do

Expansion would qualify all Kansans earning up to 138 percent of the poverty level, annually about $16,642 for individuals and $33,465 for a family of four, for Medicaid coverage.

Currently, Kansas limits Medicaid eligibility to children and pregnant women in low-income families, people with developmental and physical disabilities, and seniors who cannot afford nursing home care. Parents are eligible only if they earn less than a third of the federal poverty level, or about $9,200 annually for a four-person family.

Single adults without children are not eligible.

An estimated 300,000 Kansans would qualify for coverage under expansion, though only about half that number would enroll in the first year, according to estimates.

Jim McLean is managing director of the Kansas News Service, a collaboration of KCUR, Kansas Public Radio and KMUW covering health, education and politics in Kansas. You can reach him on Twitter @jmcleanks. Kansas News Service stories and photos may be republished at no cost with proper attribution and a link back to kcur.org.